Acquisition of businesses and subsidiaries
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Acquisitions
The Group made a number of bolt-on acquisitions during the year namely: The Punjab Kitchen Limited (United Kingdom) a market leading manufacturer of texture modified meals and specialist ready meals, supplying primarily into the United Kingdom NHS and healthcare sector; Igartza, S.L. (Spain) a broadline foodservice distributor located in Guipúzkoa, northern Spain; and in-territory bolt-on acquisitions of KBC Foods (Australia), Six Bar Trading 409 CC (South Africa) and Foodchoice (Chile).
Qualitative factors that support (but, not limited to) the goodwill recognised during the year:
- Gaining access to new geographies (Guipúzkoa, northern Spain)
- Improving purchasing power for the Group
- Management's skill and expertise as a platform from which to consolidate their respective fragmented foodservice markets
These acquisitions form part of the Group's strategic expansion plans in the international foodservice industry. Goodwill arose on the acquisitions as the anticipated value of future cash flows that were taken into account in determining the purchase consideration exceeded the net assets or net liabilities acquired at fair value and separately identifiable intangible assets. The acquisitions have enabled the Group to expand its range of complementary products and services and, as a consequence, has broadened the Group's base in the market place. There were no significant contingent liabilities identified in the businesses acquired.
The impact of these acquisitions on the Group's results can be summarised as follows:
| Punjab Kitchen R000 |
Igartza, S.L. R000 |
Other smaller acquisitions R000 |
Total R000 |
||
|---|---|---|---|---|---|
| Property, plant equipment | 48 093 | 34 113 | 6 341 | 88 547 | |
| Intangible assets | – | 10 | – | 10 | |
| Deferred taxation | (37 510) | (310) | – | (37 820) | |
| Interest in associates | – | 4 244 | – | 4 244 | |
| Investments and loans | – | 51 | – | 51 | |
| Inventories | 11 366 | 19 901 | 16 340 | 47 607 | |
| Trade and other receivables | 24 712 | 27 877 | 5 660 | 58 249 | |
| Cash and cash equivalents | 80 630 | 7 816 | – | 88 446 | |
| Borrowings | – | (7 801) | – | (7 801) | |
| Trade and other payables | (10 294) | (43 861) | (16 448) | (70 603) | |
| Taxation | (7 179) | – | – | (7 179) | |
| Total identifiable net assets at fair value | 109 818 | 42 040 | 11 893 | 163 751 | |
| Separately identifiable intangible assets | 192 672 | – | – | 192 672 | |
| Goodwill | 216 538 | 113 159 | 36 251 | 365 948 | |
| Non-controlling interests | – | – | (3 950) | (3 950) | |
| Total value of acquisition(s) | 519 028 | 155 199 | 44 194 | 718 421 | |
| Cash and cash equivalents acquired | (80 630) | (7 816) | – | (88 446) | |
| Vendors for acquisition recognised | (79 673) | (34 615) | (24 269) | (138 557) | |
| Puttable non-controlling interest liabilities recognised | (70 464) | – | – | (70 464) | |
| Costs incurred in respect of acquisitions | 4 186 | 3 192 | 20 308 | 27 686 | |
| Net amount(s) paid | 292 447 | 115 960 | 40 233 | 448 640 | |
| Date acquired | January 1 2019 | July 17 2018 | Various | ||
| Contribution to results for the year | |||||
| Revenue | 96 945 | 225 456 | 195 058 | 517 459 | |
| Trading profit (loss) | 18 626 | 13 928 | (3 614) | 28 940 | |
| Contributions to results for the year if the acquisitions had been effective on July 1 2018 | |||||
| Revenue | 183 497 | 245 952 | 233 422 | 662 871 | |
| Trading profit (loss) | 36 699 | 15 194 | (3 230) | 48 663 |